Political Uncertainty Leads to Investors Reviewing Portfolio Size

Ongoing political uncertainty has led to many buy to let investors reviewing their portfolio sizes and raising rents, according to the latest sentiment research from Foundation Home Loans.

Over a third of UK landlords (38 per cent) have reviewed the size of their portfolios following the EU Referendum and General Election in order to gauge whether they could withstand potential growing costs amidst current political uncertainty. 7 per cent said that they had sold off properties in order to reduce the size of their portfolios or diversify, a figure which rose to 19 per cent for buy to let investors holding 20 properties or more.

30 per cent of those surveyed raised rental prices. The largest proportion of landlords doing this was in the East Midlands, at 41 per cent. This is likely to do with landlords recognising the growing popularity of the area for professionals looking to commute.

However, unusually the East Midlands was also the region within which the highest proportion of landlords reviewed their portfolios, suggesting that confidence in demand would not offset the pressures that accompany tax and policy change. Landlords operating in Central and Outer London followed closely behind at 45 per cent and 40 per cent respectively

71 per cent of landlords said that they had experience a drop in confidence, a figure which rose to 78 per cent and 77 per cent in Central and Outer London.

Marketing Director at Foundation Home Loans, Jeff Knight, said: ‘Landlords have been met with a raft of changes, from stamp duty charges to shifts in tax policy, and the lack of certainty on the political front has clouded the picture somewhat. The response has been to ‘batten down the hatches’, streamlining larger portfolios and protecting income by increasing rents – decisions that can be reviewed once the buy to let market is more accommodating. The fact remains that, whether it’s as a stepping stone to home ownership or a longer term lifestyle decision for tenants, the rental sector is an increasingly important part of the housing mix. This will ultimately be best served by a wide choice of property, and good landlords who can have confidence in decent returns.’

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